Architectural Engineering Business Plan

Pyramid Engineering specializes in mechanical, electrical, plumbing, and fire protection. We provide engineering, design, and consulting services for government, educational, healthcare, and commercial facilities, subcontracting with architects. Our firm utilizes technologically superior processes to deliver greater value and improved design and construction.

Our target clients are architectural firms, and our work is segmented into educational, healthcare, commercial, and government facilities, as well as contractors. Our competitive edge lies in our knowledge of digital design resources, coupled with superior customer service. Additionally, we have implemented a quality control and assurance program to enhance production.

Pyramid Engineering, P.C. is a privately owned professional corporation based in Pennsylvania. The company was founded by John Lavoie, Tom Heasley, John Solarczyk, and Eric Haugh, all licensed engineers with a combined experience of 90 years.

We anticipate sales exceeding $350,000 in Year 1, increasing to over $400,000 by the end of Year 2. Year 3 is expected to see significant profit growth as we establish a stronger global presence.

The key challenges moving forward include expanding our client base and positioning the firm for the global market.

This business plan outlines our objectives, focus, and implementation strategy. We are seeking an additional $26,000 in short-term borrowing to ensure cash flow stability during our first profitable year.

Our mission is to provide professional engineering services for construction and related activities to a mix of public and private clients. We are committed to high standards of client service, staff development, ethical practice, and reasonable profit.

Clients seek us out for our reputation as an integrated engineering firm whose ability to collaborate extends beyond our own walls to embrace clients, the project team, and the surrounding community.

We will be recognized for our design excellence, systems integration, and commitment to sustainability. Our designs will advance the concept of the unity of people, materials, and environment as a greater whole.

We seek to add value through innovation and creativity, aligning ourselves with our clients’ goals and delivering quality, timely, and cost-effective services.

Pyramid’s objectives include achieving revenues of $350,000 in Year 1, approaching $400,000 at the end of 5 years, capturing 10% of the market by the end of the fifth year, achieving profitability within three years, and becoming a premier engineering firm in western and central Pennsylvania within five years.

Keys to success for Pyramid include providing professional quality services on time and on budget, developing visibility to generate new business leads, implementing a follow-up strategy to gauge performance with clients, implementing quality control and assurance policies, and leveraging expertise into multiple revenue generation opportunities.

Pyramid Engineering, located in Altoona, Pennsylvania, was incorporated four years ago. Comprised of highly qualified registered professional engineers, Pyramid provides services in Electrical, Mechanical, Plumbing, and Fire Protection Engineering. Market segments serviced by the firm include local and state governments, educational institutions, healthcare facilities, and commercial groups requiring design, updates, or repair.

Pyramid’s engineers are registered in 22 states and the District of Columbia and have over 90+ years of combined work experience. Communication and integrated design concepts allow Pyramid to create unique designs tailored to clients’ needs.

Our services include consulting, engineering, and design services for a wide variety of facilities, including commercial, institutional, governmental, and healthcare complexes. Our focus is on public and private sector architectural markets in the Northeast, as well as government and healthcare groups with multiple facilities.

Pyramid Engineering was founded by four partners and incorporated as a professional corporation in 2000. The company initially operated part-time until full-time operation began in May 2003. The start-up was funded through accounts received from 1999 to 2002 revenues, and an initial SBA line of credit loan of $50,000 was used to cover day-to-day operations.

Past Performance:

Year 2001 2002 2003

Sales $0 $63,261 $225,907

Gross Margin$0 $63,261 $225,907

Gross Margin % 0.00% 100.00% 100.00%

Operating Expenses $0 $25,341 $249,828

Collection Period (days) 0 72 74

Balance Sheet:

Year 2001 2002 2003

Current Assets

Cash $0 $35,119 $2,599

Accounts Receivable $0 $25,040 $67,130

Other Current Assets $0 $0 $0

Total Current Assets $0 $60,159 $69,729

Long-term Assets

Long-term Assets $0 $5,345 $9,628

Accumulated Depreciation $0 $5,345 $5,345

Total Long-term Assets $0 $0 $4,283

Total Assets $0 $60,159 $74,012

Current Liabilities

Accounts Payable $0 $0 $7,666

Current Borrowing $0 $0 $29,609

Other Current Liabilities (interest free) $0 $0 $0

Total Current Liabilities $0 $0 $37,275

Long-term Liabilities $0 $0 $0

Total Liabilities $0 $0 $37,275

Paid-in Capital $0 $0 $0

Retained Earnings $0 $60,159 $55,858

Earnings $0 $0 ($19,121)

Total Capital $0 $60,159 $36,737

Total Capital and Liabilities $0 $60,159 $74,012

Other Inputs

Payment Days 30 30 30

Sales on Credit $0 $63,261 $225,907

Receivables Turnover 0.00 2.53 3.37

2.2 Company Ownership

Pyramid Engineering, P.C. is a professional corporation chartered in Pennsylvania and privately owned by the four founding partners.

John M. Lavoie, P.E. has over 50 years of experience in electrical engineering, project management, and management for consulting firms and industry. He has designed power distribution, lighting, communication, security, and fire protection systems for industrial, commercial, and institutional buildings.

Services

Pyramid Engineering offers building engineering services for mechanical, electrical, plumbing, and fire protection systems. We specialize in educational facilities, health/senior facilities, commercial buildings, government facilities, program management, contractor design/build engineering assistance, and subcontracting services.

Our projects involve renovations, rehabilitation, additions, and new construction. We provide innovative and economical design services using state-of-the-art technology, meeting the needs of clients of all sizes.

3.1 Sales Literature

We have developed a modular brochure system that covers various target market segments. The brochures can be customized with individual sheets to suit specific needs. Our website provides information about our services, target market, contact details, representative projects, and resumes.

We are also developing templates for project proposals, which include a cover letter, scope of services, fee (if requested), firm qualifications, project team, design approach philosophy, relevant experience, and service schedule.

3.2 Technology

Pyramid Engineering utilizes modern technology for all project phases, including CAD software for design and presentation work. We also use specialty design software and internet transfer of information for efficient collaboration with consultants and clients.

We maintain comprehensive, Windows-based analysis tools for design and have an internet website with file transfer and email capabilities.

3.3 Future Services

We offer project consulting, dispute resolution, restoration engineering, and fabrication and detailing drawings as future services for clients.

Market Analysis Summary

Our target market includes governments, private sector/commercial entities, healthcare/senior facilities, educational institutions, and engineering/architectural firms.

4.1 Market Segmentation

Government construction spending is expected to increase as state agencies and local governments renovate existing facilities to accommodate their restructured programs.

Market Analysis:

Potential Customers Growth 2004 2005 2006 2007 2008 CAGR

Educational 3% 200,000 250,000 300,000 262,656 269,222 7.71%

Health Care / Senior Facilities 0% 75,000 75,000 75,000 50,000 50,000 -9.64%

Commercial 0% 30,000 30,000 30,000 30,000 30,000 0.00%

Government 0% 30,000 30,000 30,000 30,000 30,000 0.00%

Program Management 0% 5,000 5,000 5,000 5,000 5,000 0.00%

Contractor / Design Build 0% 5,000 5,000 5,000 5,000 5,000 0.00%

Sub Contracting 0% 5,000 5,000 5,000 5,000 5,000 0.00%

Total 3.02% 350,000 400,000 450,000 387,656 394,222 3.02%

4.2 Target Market Segment Strategy

Our target market segments require skilled engineering work for their buildings or facility needs. They need engineers who understand their requirements, budget constraints, and legal/code requirements for their facilities’ purposes and locations.

Our engineers are certified with years of experience in their fields and strong relationships with government developers, commercial developers, and local school districts in the Northeast. We will utilize these contacts to learn about new projects, develop competitive bids, and provide high-quality services to these market segments.

Architectural and engineering firms often require additional engineering consulting. Architects always need skilled engineers to bring their designs to life, and large engineering firms sometimes have an overflow of work.

In targeting established architectural firms, our strategy is to offer them a reliable resource for their engineering needs. We can handle the entire mechanical, electrical, plumbing, and fire protection engineering process for their architectural projects.

4.3 Service Business Analysis

The engineering, design, and consulting business consists of various smaller consulting organizations and individual consultants, along with a few well-known architectural/engineering companies.

Pyramid’s challenge is to establish itself as a reputable engineering, design, and consulting company, positioning itself as a low-risk corporate purchase.

4.3.1 Competition and Buying Patterns

Trust in the professional reputation and reliability of the engineering firm is the key element in purchase decisions at the client level.

Pricing of projects and billing rates vary significantly. It is easier to price projects too low than too high at this level of engineering. Clients expect to pay substantial fees for high-quality professional advice. However, the billing process is sensitive, and clients are more likely to be offended by unexpected cost overruns than higher upfront costs.

Clients typically rely on word-of-mouth recommendations and past reputation when selecting consultants, rather than directly comparing multiple providers.

The most significant competition is in maintaining client relationships for repeat business. Concessions may be necessary to retain clients for future projects.

Strategy and Implementation Summary

Pyramid will leverage its existing contacts with architects, governmental agencies, commercial developers, and local school districts to increase awareness of our business through word-of-mouth. We will also send our standard brochure to architectural firms recommended by our contacts.

Our marketing to architects and developers emphasizes our comprehensive engineering expertise across all necessary skills for any project. We can provide examples of past work and recommendations upon request. Our reliable and skilled team, combined with our range of expertise, will appeal to those in need of subcontractors.

Initially, Pyramid will focus on the western and central Pennsylvania area, gradually expanding into other states in the eastern United States.

5.1 Competitive Edge

Pyramid Engineering, P.C. has the following competitive edges:

– State-of-the-art modeling, design, engineering, analysis, and drafting capabilities.

– Quality control and assurance program.

– Experienced and knowledgeable owners/engineers who thoroughly understand building codes and the target market.

For established engineering and architectural firms requiring mechanical, electrical, plumbing, and fire protection engineering and consulting services, Pyramid offers a competitive and cost-effective option. Projects can be delegated directly to Pyramid or arrangements can be made for collaboration with in-house staff.

Engineering work is typically billed on an hourly basis with conservative rates of $75/hour for basic engineering/consulting services and $40/hour for drafting services.

5.2 Marketing Strategy

To promote our presence in the marketplace, we will utilize the internet, personal contacts, direct mail, and e-mail campaigns. Additionally, we will focus our advertising budgets on community-sponsored events and offer discounted technical services to non-profit organizations.

5.3 Sales Strategy

Sales in our business depend on providing excellent client service and fostering repeat business. We develop customized proposals that meet the client’s needs rather than simply selling a project.

It’s crucial to avoid the split between selling and fulfilling a project, ensuring that the same people develop, scope, sell, and fulfill the job. This approach minimizes client dissatisfaction.

We do not drop fees to win projects. Instead, we explain the benefits of our services when a client questions the cost. If the budget is limited, we adjust the scope of services accordingly. Billing rates are non-negotiable.

5.3.1 Sales Forecast

The following table and chart provide a sales forecast. We expect sales to remain relatively constant over the next year.

Direct unit costs consist solely of labor, with a 30% gross margin. Our unit rates are set at $75/hour for basic engineering/consulting services and $40/hour for drafting services. We anticipate increasing the gross margin to 35% by providing more efficient services to our clients.

5.4 Milestones

The table lists milestones, dates, managers in charge, and budgets. The milestone schedule emphasizes planning for implementation, starting with the next three years, followed by marketing and sales literature development. Ongoing meetings and reviews ensure our planned sales and expenses align with actual results.

Milestones:

Web Plan Summary

The website will be used as a marketing tool. It will offer a description of the services offered, listing of clients served, history of the firm, resumes of key management team members, and completed project descriptions and photographs.

6.1 Website Marketing Strategy

The plan for marketing the site is simple: submit it to search engines like Google and list the website on all company correspondence and printed marketing/sales media.

6.2 Development Requirements

Pyramid will develop and build the site. The initial website, www.pyramidmep.com, was up and running in May 2003.

Management Summary

The company will be led by the four principals: John Lavoie, Tom Heasley, John Solarczyk, and Eric Haugh.

John Lavoie has over 50 years of experience in electrical engineering, project management, and consulting management for large consulting firms and industry. He has designed various systems for buildings, including power distribution, lighting, communication, security, and fire protection. He is experienced in primary power, distribution, variable speed drives systems, PLC, process control, and instrumentation. His consulting firm management experience will provide the firm with direction and guidance.

Tom Heasley has over 17 years of experience in electrical engineering and project management. His experience includes designing medium and low voltage distribution systems, interior and exterior lighting, HVAC power and control, fire protection and alarm systems, security and CCTV systems, computer power, UPS, and PLC control systems. Tom will be in charge of all electrical design.

John Solarczyk has over 14 years of experience in mechanical engineering and project management. His experience includes designing various mechanical systems, performing energy efficient surveys, and utilizing measuring and testing equipment. He is familiar with building control systems, especially direct digital control systems. John will be in charge of all HVAC and mechanical design.

Eric Haugh has over 11 years of experience in mechanical engineering. His experience includes designing various plumbing and fire protection systems. He is also NICET certified in sprinkler system layout, which includes designing wet, dry, FM200, and standpipe fire protection systems. Eric will be in charge of all plumbing and fire protection designs.

All four principals have professional engineering licenses in multiple states.

7.1 Personnel Plan

The Personnel table summarizes payroll for the next three years. John Lavoie will work part-time, while the other three partners will work full-time. We have no plans to hire any other employees at this time.

Our labor costs represent the direct cost of sales, but payments are made monthly, regardless of hours billed to clients.

Andrew Brooks

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